More than two years after the onset of the COVID-19 pandemic, the New York City tourist industry is still struggling to find its footing. Particularly hard hit is the hospitality industry, where roughly 60 percent of hotel workers remain unemployed. A hotel owner recently challenged a city law that provided those workers with a financial lifeline. The result should bring those impacted workers a measure of hope.
The long road to relief
During the darkest days of the pandemic, the federal Coronavirus Aid, Relief and Economic Security Act (CARES Act ) kept many laid-off workers financially afloat, including workers in the NYC hospitality industry. New York City’s Severance Law was designed to provide continued relief to hotel employees who remained unemployed after the federal aid packages expired in 2021. The bill forced hotels that closed entirely or laid off at least 75 percent of their staff to either reopen and recall laid-off employees or pay them a weekly severance.
Dodging a bullet
A hotel owner sued recently, claiming that the city does not have the authority to force business owners to implement severance programs such as the one prescribed by the law. A District Court disagreed, finding that the law did not force the employer to establish “an ongoing commitment … to provide employee benefits.” If the law had met that threshold, federal laws would likely have superseded the city’s law and the challenge would have been successful. Those impacted can be glad the law was designed in such a way as to survive such legal challenges.
The decision gives hotel workers a legal victory, but financial challenges will likely loom for the foreseeable future. Workers struggling after layoffs and other adverse events should know they have important rights that are worth protecting.